By Chinoyi Chipulu and Mubanga Mubanga
And economist Kelvin Chisanga says that the reduction of fuel prices is a move in the right direction but zambians should not expect a reduction of prices of daily commodities.
Speaking in an interview with Daily Revelation yesterday, Chisanga said the effect could only be seen in the next three months because business owners would be rushing to offset their stock.
He said the business community may not be certain if the prices of fuel would continue to go down and that there was always a general hesitancy in reducing prices by markets.
“Looking at the current situation obviously we understand that the Zambian situation does not allow the amnesty immediate effect to be felt, especialy when you look at the appreciation of the United States Dollar that we have seen. We have seen that the situation for demand has also cooled dowed as compared to the beginning of the summer,” he said.
Chisanga said people would want to clear their stock hence the citizens would not see this positive development taking force.
“It won’t be able to reflect almost immediately, not until they clear the stock that they bought and their goods which are on transit. In terms of supply or security of supply in terms of sustainability on the the fuel side within the local market, we will have enough sufficient stock to warrant activities here and there but in terms of the key commodities, it will be difficult for us to see the effect right there and then,” said Chisanga.
The Energy Regulation Board (ERB) has attributed the reduction in the price of fuel to increased supply of foreign exchange on the local market.
ERB stated that the appreciation was aided by the positive market sentiments, resulting from the successful completion of the third economic review of the Extended Credit Review Agreement, by the International Monetary Fund (IMF).
In a media statement, ERB board chairperson James Banda stated that petrol has been reduced from K35.56 to K31.58, and diesel to K29.11 from K31.11, while Kerosene and Jet A-1 has been reduced from K29.50 to K26.36, and K32.76 to K29.20 respectively.
Banda stated that the reduction was necessitated by the appreciation of the Kwacha against the Dollar, which appreciated by 7. 28 percent.
“Under the period under review the Kwacha appreciated significantly against the United Dollar (USD), by 7.2 per cent, that is from K26,25/US$ to K24,34/US$. The appreciation is attributed to increased supply of foreign exchange on the local market. The appreciation was aided by the positive market sentiments, resulting from the successful completion of the third economic review of the extended Credit Review agreement, by the International Monetary Fund (IMF),” stated Banda. “Consequently, the Kwacha appreciation against the United States Dollar has yielded on the demand of fuel price. Based on the foregoing, the prices for petrol, Diesel, kerosene and Jet A-1, has been adjusted downwards to K31.58/litter, K29.34/litter, K26.36/litter, K29.20/litter respectively.”
